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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Archive for June, 2009

Debt Settlement Industry Criticized by New York Times

Posted on Monday (June 15, 2009) at 12:15 am to Consumer Advice
Current Events
Debt Negotiation

Debt settlement companies are being investigated by Federal Trade Commission, state regulators, members of Congress and state legislators -- and the New York State Attorney General, Andrew CuomoWritten by Craig D. Robins, Esq.
 
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Times Article Highlights Problems With Debt Settlement Companies
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The New York Times, in an article published on June 10, 2009, drew attention to the problems with debt settlement companies, observing that the debt settlement industry is in the cross hairs of the Federal Trade Commission, state regulators, members of Congress and state legislators.
 
The article stated that many consumer advocates loathe the way the debt settlement companies solicit consumers.  According to The Times, the common complaint is that “debt settlement companies are more interested in helping themselves earn fees than aiding their beleaguered clients.” 
 
“Their ads promise the clients will get out of debt but, critics say, the reality is that they often become even more enmeshed.”
 
The Times quoted one debt settlement company spokesman who conceded that “there are a lot of bad apples in this industry.”
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New York Is Investigating the Debt Settlement Industry
 
The article was timely because New York State Attorney General Andrew Cuomo recently subpoenaed many debt settlement companies as part of a wide-ranging investigation.  I wrote about this last month:  New York Commences Nationwide Investigation Into Debt Settlement Industry — Many Offers to Eliminate Credit Card Debt are False and Misleading.
 
There is a Major Distinction Between Debt Negotiation and Debt Settlement
 
The services offered by debt settlement companies are very different from debt negotiation services offered by certain law firm such as my own.  With debt settlement companies, the consumer makes monthly payments to the company, and the company first applies these payments to their own fees before any settlement is actually made.
 
Debt settlement companies will often sign up consumers who they know, or should have known, would not be able to complete the program.  What’s more, the companies keep the fees even when services are not provided!
 
Debt negotiation offered by attorneys, however, is much different and involves negotiating settlements with the creditors.  The client typically does not pay any advance fees, other than an initial retainer.
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Consumers Using Debt Settlement Services Often Get Into Worse Financial Shape
 
In my Long Island bankruptcy practice, I cannot tell you how often we get clients who complain to us that they hired a debt settlement company, only to get into deeper financial difficulty after the company neglected to follow through on their promises of settling debts.  Debt settlement companies are unregulated and their are numerous horror stories of these companies steeling escrowed funds and going out of business.
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The Emotional Side of Debt and Bankruptcy

Posted on Sunday (June 14, 2009) at 10:15 am to Consumer Advice
Life After Bankruptcy

The Emotional Side of Debt and  Bankruptcy.  A good bankruptcy attorney must wear two hats – legal counselor and psychological counselor.Written by Craig D. Robins, Esq. and Dean Weber, Esq.
 
A good bankruptcy attorney must wear two hats – legal counselor and psychological counselor
 
When a person considers filing for bankruptcy, he or she often feels a lot of emotions — especially feelings regarding their financial situation.
 
Sometimes, one feels a certain sense of dread, or a feeling that he or she is a “failure”, or “worthless.”  These are very common thoughts and feelings to have for someone who is overwhelmed with debt.
 
In meeting with our various Long Island bankruptcy clients, we often observe that a person’s self-worth is intertwined with his or her finances.   As such, we’ve learned that a bankruptcy attorney has several roles, one being  to help clients accept that bankruptcy will provide a fresh new start – not just financially, but emotionally as well.
 
Losing a job, having difficulties in a relationship, suffering from illness, and just trying to deal with overwhelming debt, are all factors that can take a sizable psychological toll.  There’s no doubt that many bankruptcy clients are stressed out at the time they seek bankruptcy help.
 
That’s why bankruptcy attorneys should also help clients learn from the bankruptcy experience so that they can let go any negative emotions of blame and bitterness, and instead focus on the positive aspects of getting their finances under control and getting a fresh new start.
 
A good bankruptcy lawyer, such as those in our firm, will help the client come to terms with these emotional issues and smoothly guide them through the bankruptcy process. 
 
Those with debt problems should select a bankruptcy attorney that he or she feels comfortable with – from both a legal and an emotional standpoint.  Someone under serious mental strain from major financial problems requires experienced legal counsel – not just with legal issues, but with life experiences as well.
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Note:  Dean Weber, Esq. is a bankruptcy lawyer with our firm
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Middle-Class Being Driven Into Bankruptcy by Recession According to Report

Posted on Friday (June 12, 2009) at 8:15 am to Bankruptcy and Society

Middle-Class Being Driven Into Bankruptcy by Recession According to Report

Written by Craig D. Robins, Esq.

This week, the Institute for Financial Literacy released a report which reveals that more middle-class Americans than ever are filing for bankruptcy as a result of the recession.

The report found that those Americans earning $40,000 or more per year are increasingly seeking debt relief through bankruptcy. 

The study found that the average American in financial distress which seeks credit counseling services is a 35-to-44 year-old married Caucasian with a high school degree or some college who is employed and earning less than $30,000 per year.  In addition, many Americans, with incomes greater than $40,000 were also filing bankruptcy.

However, the report also found that greater percentages of the following demographic groups were filing for bankruptcy:

        Americans 45 to 64 years old

        Americans of Asian and Caucasian descent

        Americans with Associates or Bachelors degree

        Americans earning $40,000 or more per year

        Americans who are self-employed

        Americans who are married 

The report found that the four most common causes of financial distress included overextension on credit, unexpected expenses, reduction of income and job loss.

The findings of this report echo findings of other studies which have concluded that bankruptcy has indeed become a middle-class phenomenon.  Certainly, most Long Island bankruptcy filers these days are smack in the middle of the middle-class.  Click here to read the full report. 

I just wrote a few days ago that most of my bankruptcy clients are typical middle class Long Island families.  I wrote about this phenomenon several years ago in an article, Consumer Bankruptcy: Bankruptcy has Become a Middle Class Phenomenon.
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I Live on a Boat. Can I Protect the Boat in Bankruptcy?

Posted on Thursday (June 11, 2009) at 5:20 pm to Bankruptcy Exemptions
Bankruptcy Practice
Chapter 7 Bankruptcy

Boats and boat slips can be protected as exempt in some bankruptcy casesWritten by Jason S. Leibowitz, Esq.
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Boat owner seeks to use homestead exemption to protect boat slip in bankruptcy
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Last week, I had some bankruptcy hearings before Long Island Chapter 7 bankruptcy Trustee Robert L. Pryor.  One of the cases that the trustee called first was rather interesting because the debtor was living on a boat and sought to exempt the boat slip by using the homestead exemption.
 
Bankruptcy attorneys regularly use the homestead exemption to protect a debtor’s home.  It was rather unusual that this debtor was seeking to protect a boat slip that he owned, especially considering that he didn’t even own the boat in the slip; he was using a friend’s boat.  However, the debtor testified that he lived on the boat which was parked in the boat slip.
 
Ordinarily, assets such as boats and boat slips are considered luxury possessions that are not protected by exemption statutes.  Here, however, the debtor claimed the boat slip was, in essence, a necessity — his home.
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Trustee Pryor seriously questioned the validity of this exemption.  “We are going to have to look into this,” he said.  “I’m not sure you can exempt a boat slip as a homestead.”
 
At this point, I thought the debtor had a losing proposition.  It didn’t seem possible that a debtor can exempt a boat slip in a Chapter 7 bankruptcy.
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However, I was really curious about this.  Upon returning to the office, I decided to quickly check some case law. 
 
The main question presented at the meeting of creditors was whether the debtor could claim the homestead exemption on a property (the deeded boat slip) that he owned but could not technically live in.  I found that although the issue appears to remain unreported in New York, bankruptcy courts in other jurisdictions have weighed in on similar issues. 
 
 In one Florida case, the trustee objected to debtor’s claimed homestead exemption and moved to compel the debtor to turn over the boat as he believed it was non-exempt property.  The bankruptcy court held that the exemption was proper under the state constitutional and statutory provisions since “the boat was a dwelling house berthed at rented dock space that was deemed land the debtor did not own but which he lawfully possessed.”  In re Mead, 255 B.R. 80 (Bankr. S.D. Fla. 2000).
 
The Mead court added that the boat was a dwelling house since it was equipped as a residence, the debtor actually resided on the boat, and the debtor had no other residence. The Florida exemption expressly extended to such dwelling houses situated on leased rather than owned land, and the connection of the boat to the dock provided a sufficient connection to such unowned land. 
 
Another case involved debtors that attempted to protect not only their boat, but also their deeded slip as their permanent residence.  Similarly, it was the trustee’s position that, separately, neither the boat dock slips nor the boat itself can create a homestead because the docks cannot be used as a home without the boat, even if it may have been possible that the boat could be used as a home without the docks.  In re McMahon, 60 B.R. 632 (Bankr. W.D. Ky. 1986).
 
The McMahon court held that the boat dock was what provided the boat with the necessary utilities, and noted that exemption laws in favor of the debtor are to be liberally construed.  The court concluded that that the statutory provisions for homestead exemptions satisfy a proper legislative objective by providing the debtor and the debtors dependents with a new financial start, and it is incumbent upon the Court to liberally interpret and construe them so that the end sought to be accomplished may not be defeated. 
 
The court analyzed the several factors in arriving at its determination.  Those were the following; the amount of time which the debtors had lived on the boat and that they seemed to have no other residence, that the boat dock slips were real estate to which the debtors have a properly recorded deed, and the boat dock slips were an integral part of the debtors maintaining a residence on the boat by providing the necessary utility hookups. 
 
Finally, the McMahaon court analogized that case to one in which a debtor claims a homestead exemption in the real estate upon which a mobile home or condominium is constructed or rested. 
 
In view of the principle that the exemption laws are to be liberally construed in favor of the debtor, the McMahon court found that both the boat and dock slip comprised the debtors’ permanent residence and qualified for the homestead exemption pursuant to Kentucky law.
 
The research presses home one of the most important policies contained in this country’s bankruptcy laws:  that the Bankruptcy Court will usually liberally construe the law in favor of the debtor so that an honest debtor can eliminate debts and get a fresh new financial start.
 
Thus, the debtor in this Central Islip bankruptcy case may well be able to keep and protect his boat slip and home after all — and discharge all of his debts as well.
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Note:  Jason S. Leibowitz, Esq. is a full-time associate in our firm
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If Miss California Files Bankruptcy, What Kind of Bankruptcy Would She File?

Posted on Wednesday (June 10, 2009) at 6:10 pm to Chapter 7 Bankruptcy
Current Events

Miss California with Donald Trump, who just fired herWritten by Craig D. Robins, Esq.
 
Using a hypothetical, let’s explore how the new bankruptcy laws would apply to a celebrity with income-producing ability who loses their job
 
Miss California, Carrie Prejean, just heard the words this afternoon that many middle-class Americans are hearing all too much these days:  “You’re Fired!”
 
She got the pink slip from her Miss America Pageant boss, Donald Trump, who had practiced saying these most-feared words, “You’re Fired,” weekly on his The Apprentice TV show.
 
Now that she’s without a job, let’s do the hypothetical:  If she had to file for bankruptcy relief because of overwhelming debt, what kind of bankruptcy would she file?  What bankruptcy chapter would it be?  Chapter 7?  Chapter 11?  Chapter 13?  Would she face any issues?
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Unlike most consumers, celebrities often have great future income-earning potential
 
Let’s assume that she has gone through whatever money she had won, she has no job, and she has a significant amount of credit card debt.  Let’s also assume that she has a car, some jewelry, and some valuable and expensive designer clothes.
 
Initially one would think that Chapter 7 bankruptcy is the appropriate way to go.  Sure, she might have to turn over her jewelry; she might or might not be able to keep her car — depending on the amount of equity in it; and a trustee would probably not care about her clothes — even if they are designer duds.  But she would be able to eliminate her debts.
 
However, not so fast.  The U.S. Trustee might decide to look closer at the case for signs of “abuse.”  The U.S. Trustee reviews each and every bankruptcy filing for this.
 
The U.S. Trustee considers future income-earning ability in determining whether a bankruptcy filing is abusive
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Knowing that Miss California is a celebrity very much in the news, the U.S. Trustee could argue that her Chapter 7 bankruptcy, where the objective is to discharge all debt, would be an abuse of the bankruptcy laws.  They could argue that even though she may not have the ability to pay her debts now, her celebrity status and story could theoretically enable her to earn substantial amounts of money in the future. 
 
After all, she can probably make a million dollars or more selling her autobiography, licensing the rights to her life story, or giving speeches at $25,000 a pop. 
 
As such, the U.S. Trustee can argue that she has a great ability to earn substantial money in the future, even without the job of Miss California.  They would then argue that if she wants to stay in bankruptcy, she would have to convert her case to one under Chapter 13, assuming her credit card debts are less than a $336,000, or even Chapter 11, if she cannot demonstate a regular monthly income, which is a normal requirement for Chapter 13 cases.
 
In Chapter 13, she would probably be called upon to pay back her creditors in full with a monthly payment plan, assuming that she was able to bring in sufficient income.  If she couldn’t bring in the necessary income to fund a plan right away, or if her debts exceeded $336,000, she would instead have to file for Chapter 11 relief.
 
On the other hand, she could oppose the U.S. Trustee’s position by arguing that she has no plans to take financial advantage of  her celebrity status,  and that she would be in the poor house like so many other Americans who have been recently let go.  If the bankruptcy judge found such a position to be credible, then she could get her Chapter 7 discharge and eliminate her debts.
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What can we learn from this hypothetical as it applies to consumers
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The sad fact is that today, many consumers are losing their jobs, and they can be from any economic class — lower, middle or even upper.  In these recessionary times, not only are factory workers losing jobs; doctors who work as staff physicians in hospitals are being laid off, too.
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If a factory worker or an automobile salesperson loses his job, they would probably encounter no opposition from the U.S. Trustee in a Chapter 7 filing based on potential earning ability.  However, if a doctor, who was earning hundreds of thousands of dollars a year, loses a hospital position, the U.S. Trustee would probably want to review the likelihood that the doctor could return to work soon at a substantial salary, even if it is not as much as the prior income.
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Thus many middle class Americans will have no problem filing for Chapter 7 bankruptcy relief; whereas a select few high-earners wil have to consider other bankruptcy options such as Chapter 11 and 13.
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Note:  This post is a revision of my original post.  One of my loyal blog readers brought to my attention that maybe I initially ribbed Miss California, a person of recent controversy in the news, too much.  If I offended anyone, I apologize.
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Loan Modification Industry is a “Sham” Says Attorney General Cuomo !

Posted on Tuesday (June 9, 2009) at 7:45 pm to Current Events
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Loan Modification Industry is a Written by Craig D. Robins, Esq.
 
Cuomo takes action after being besieged by consumer complaints that loan modification companies are not fulfilling promises
 
In a news conference this morning, New York State Attorney General Andrew Cuomo said what I have been saying for quite some time. 
 
“In many ways, the entire industry is a scam, in my opinion,” Cuomo said.
 
Cuomo announced that he is suing American Modification Agency, also known as Amerimod, a Uniondale-based loan modification firm, and its owner, Salvatore Pane.  He accused the Long Island mortgage modification company of fraudulent advertising and charging illegal fees.
 
This news comes one week after Newsday broke a two-day cover story on foreclosure help scams in which I was quoted.  In that article, I indicated that I do not do loan modifications.  See Today’s Newsday Cover Story Is About Long Island Foreclosure Scams .
 
Cuomo is also pursuing five other Long Island mortgage modification companies: Nationwide Modification Agency in Hauppauge; Global Modifications Inc. in Ronkonkoma; Loan Modification Affiliate Exchange, or LoanMAE, in Oceanside; Hometown U.S.A. in Plainview; and CloseMore Financial Corp. in New Hyde Park.  He is also issuing subpoenas to nine other companies outside of Long Island.
 
The Attorney General is also pursuing a Long Island Loan Modification attorney —  Brett Margolin, Esq. for possible fraudulent practices.
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Many of these companies claim that they have very high success rates, while the Governor says that this is not true.  He said his investigation follows complaints from homeowners across New York that loan modification companies did not fulfill promises, and often left customers deeper in debt.
 
Amerimod apparently pulled out all the stops to bring customers in, but hardly did anything for them once it collected their money. Phone calls went unanswered; untrained agents dissatisfied with paltry commissions resigned, leaving customers in the lurch; and homeowners received foreclosure notices despite guarantees that their homes would be saved.
 
Cuomo said the economic and housing downturns had allowed “unscrupulous people” to take advantage of frightened borrowers.
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Pro Hac Vici Motions for E.D.N.Y. Bankruptcy Court Cases

Posted on Tuesday (June 9, 2009) at 5:00 am to Bankruptcy Practice
Lawyer to Lawyer

Attorneys admitted in other federal courts can also practice in Long Island Bankruptcy Court if they get permissionWritten by Craig D. Robins, Esq.
 
Attorneys admitted in other federal courts can also practice in Long Island Bankruptcy Court if they get permission
 
I previously wrote that Only Certain Attorneys Can Practice in Bankruptcy Court here on Long Island or Brooklyn.  The attorney has to be admitted to the United States District Court for the Eastern District of New York.
 
However, attorneys from other jurisdictions can also practice in our court by making a “motion pro hac vici.” 
 
Pro hac vici” is Latin for “this time only.  So if an out-of-state attorney has a pending matter in our court, he or she can simply petition the court for temporary admission that is applicable to that one case.
 
The procedures for being admitted pro hac vice are set forth in E.D.N.Y. Local Bankruptcy Rule 2090-1(b), which include bringing a motion, an affirmation in support, and a proposed order.  The attorney must also file a Certificate of Good Standing issued within 30 days and pay a $25 filing fee.
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Why Are More People Filing Bankruptcy on Long Island This Year?

Posted on Monday (June 8, 2009) at 7:15 am to Consumer Advice
Long Island Economy

Written by Craig D. Robins, Esq.
 
More people are filing bankruptcy on Long Island to eliminate credit card debtsLong Island consumers are eliminating credit card debt and stopping foreclosure in droves by filing for bankruptcy relief
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Bankruptcy filing numbers are universally up across the country including Long Island.  The reason for this is simple.  Job losses and the disastrous housing market, combined with high medical bills and a recessionary economy, are driving more people to seek bankruptcy relief.
 
Many consumers who might have previously coasted by under such financial pressure can no longer do so because of the tightened credit market.  They find that they just cannot borrow any more from credit card accounts to make ends meet.
 
With many additional people expected to be laid off as the result of General Motors and Chrysler filing their own bankruptcies, even more consumers will need to consider bankruptcy as an option for dealing with their debts.
 
Long Island residents in serious financial trouble from Nassau County to Suffolk County are learning that bankruptcy is often the best way to get a fresh new financial start.
 
When consumers can’t pay debts bankruptcy can provide debt relief.  It can also stop foreclosure.  And if Bankruptcy is not a good fit for one reason or another, then debt negotiation is a possibility.  We’re finding that the risk officers at credit card companies are realizing that they are better off accepting a reasonable settlement on a credit card debt, rather than get nothing at all in a Chapter 7 bankruptcy filing.
 
So what can you do if you’re in a bad debt situation?  Don’t wait until you’re drowning in bills.  If you have trouble making even one payment, that means it is time to talk to a debt negotiation and bankruptcy attorney to learn your options.
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Long Island Foreclosure Case Dismissed!

Posted on Sunday (June 7, 2009) at 7:15 am to Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Long Island Foreclosure Case Dismissed!  Mortgage Company messes up resulting in foreclosure case being tossed out of courtWritten by Craig D. Robins, Esq.
 
Mortgage Company messes up resulting in foreclosure case being tossed out of court
 
Last year, a Nassau County family retained me to defend a mortgage foreclosure suit that had been just served upon them.  They weren’t sure if they wanted to keep the house, which no longer had any equity.  We discussed the possibility of a future bankruptcy, but we agreed to defend the foreclosure in the meantime to give them as much time in the house as possible.
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The mortgage was an adjustable rate mortgage that had recently jumped an incredible $1,500 a month.  To make matters worse, the wife had been in a bad car accident and had become disabled.
 
After reviewing the mortgage foreclosure summons and complaint, I determined that I could properly assert several defenses.  One of the defenses had to do with the fact that the mortgagee sold the mortgage to another mortgage company and it appeared that the new mortgagee did not properly file all of the necessary assignment papers.
 
Eventually the mortgage company brought a motion for summary judgment, claiming that the our defenses to the foreclosure were no good.  I fought back, insisting that the mortgagee neglected to file all of the necessary assignment and transfer paperwork, and that they did not have proper legal standing to continue the foreclosure case.
 
After the Nassau County Supreme Court judge reviewed the foreclosure motion papers for several weeks, he issued a decision:  foreclosure dismissed!!!
 
The judge agreed with my position that the mortgagee did not have standing because the mortgagee failed to demonstrate that the assignment paperwork was recorded.  Accordingly, the judge dismissed the foreclosure action and complaint.   Score a win for the homeowner!
 
Even if the mortgagee corrects their mistake and files another foreclosure proceeding tomorrow, the homeowners will still end up being able to stay in the house without making any further mortgage payments for another year.  Then, they would have the right to file for bankruptcy and eliminate the mortgage company’s ability to pursue them for any mortgage deficiency.
 
Mortgage foreclosure defense is one of the many ways I help Long Island homeowners in these troubled financial times.
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Bankruptcy Filings Returning to Pre-Amendment Levels

Posted on Saturday (June 6, 2009) at 11:45 am to Bankruptcy and Society
Bankruptcy Statistics

Bankruptcy Filings Returning to Pre-Amendment Levels
Written by Craig D. Robins, Esq.
 
Last month, for the first time since the Bankruptcy Amendment Act had the effect of radically changing the bankruptcy laws in October 2005, the daily number of nationwide filings surpassed the 6,000 mark.
 
This represents a whopping increase from last year of over forty percent. 
 
Professor Robert Lawless, of the University of Illinois College of Law, provided some interesting commentary on these statistics in a post this week appearing in the Credit Slips blog.  He suggests that if bankruptcy filings continue at this level, there will be about 1.5 million bankruptcy filings this year.  That is right on par with the level of filings from 2005, just before the bankruptcy law changed.
 
Chart courtesy of Robert Lawless, Credit Slips
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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »

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Craig D. Robins, Esq.
35 Pinelawn Road, Suite 218E, Melville, NY 11747.

Tel : 516 - 496 - 0800

CraigR@Craigrobinslaw.com